Kataria Industries Limited has announced a significant development in its growth strategy by acquiring the Wire Division of Ratlam Wires Pvt. Ltd. This acquisition is being executed on a slump sale basis, ensuring the continuation of the operations and leveraging the strengths of both companies. This strategic move aligns perfectly with Kataria’s objectives to enhance its product portfolio and expand its footprint in the steel wire industry, which is crucial for its long-term growth plans.

Overview of the Acquisition

The Wire Division of Ratlam Wires Pvt. Ltd. is recognized for its high-quality steel wire products, which include Spring Steel Wires, PC Strand Wires, and both Galvanized and Ungalvanized Wires. This acquisition not only strengthens Kataria Industries' position in the steel wire sector but also enables the company to cater to a broader spectrum of industries, particularly the automobile and railway sectors.

The figures provided in the financial breakdown showcase the turnover of the Wire Division, reflecting its robust market presence. For instance, in the period from April 1, 2024, to October 21, 2024, the division reported a turnover of ₹893.84 million. The previous fiscal year (2023-24) recorded a turnover of ₹1,519.87 million, marking a substantial growth trajectory for the division, which had ₹1,364.18 million in the fiscal year 2022-23.

About Ratlam Wires Pvt. Ltd.

Established in 1986, Ratlam Wires Pvt. Ltd. has built a reputation as a premier manufacturer of high-quality steel wires, with an impressive annual production capacity of 30,000 MT. The division operates from a 1,98,848 sq. ft. facility in the Industrial Area of Ratlam, equipped with advanced machinery including:

  ▪ Wire Drawing Machines

  ▪ Stranding Machines

  ▪ Straight Line Machine

  ▪ Heat Treatment Furnace

  ▪ Testing Machines and Material Handling Equipment

  ▪ Laboratory Equipment

The operational capabilities of Ratlam Wires are further enhanced by its power connections—33 KVA (HT) and 11 KVA (LT)—along with an 800 KVA wind energy converter for captive consumption. The division employs over 170 skilled workers, solidifying its status as a significant player in the steel wire manufacturing industry.

Financial Insights

The total consideration for the acquisition stands at ₹306.00 million, which is slightly higher than the Net Asset Value (Net Worth) of ₹302.70 million, as per the unaudited financials dated October 21, 2024. This strategic financial decision reflects Kataria Industries' commitment to bolstering its market position while ensuring a positive return on investment.

Statement from the Managing Director

Mr. Arun Kataria, the Managing Director of Kataria Industries Limited, expressed his enthusiasm regarding the acquisition. He stated, "We are excited about the acquisition of Ratlam Wires’ Wire Division, which is expected to enhance our turnover and margins through the combined synergies of both businesses. This move is perfectly aligned with our long-term growth strategy and will enable us to better serve a wider range of industries."

This statement underscores the strategic vision that drives Kataria Industries as it navigates the competitive landscape of the manufacturing sector.

Strategic Significance

The acquisition signifies a vital step for Kataria Industries in its quest for growth and expansion. The synergy between Kataria and Ratlam Wires allows for the blending of expertise, resources, and market reach, ultimately enhancing the service offerings to diverse industries.

As the steel wire market continues to evolve, Kataria Industries is positioned to leverage its expanded capabilities to meet the rising demands from sectors like automobiles and railways, which require high-quality steel wire products for various applications.

Conclusion

In conclusion, Kataria Industries’ acquisition of the Wire Division of Ratlam Wires Pvt. Ltd. represents a proactive approach to enhancing its market position and product offerings within the steel wire industry. This strategic move not only reinforces the company’s operational capabilities but also sets the stage for sustainable growth in the coming years.

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With these strategic moves and acquisitions, Kataria Industries is well-positioned to achieve its growth objectives and continue to make an impact in the steel wire manufacturing sector.